Bureau of the Fiscal Service RFI-FSA-23-093 PCA Services.pdf

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Sources Sought Notice - Private Collection Agency Services

Solicitation #: TBD Date Posted: July 24, 2023.

Title: Private Collection Agency (PCA) Services Product Service Code: R705 NAICS Code: 561440 Response Date: July 31, 2023; 10:00 am ET.

Introduction

This Sources Sought Notice is issued by the Bureau of the Fiscal Service on behalf of Disbursing and Debt Management (DDM). The purpose of this Sources Sought Notice is to obtain industry information and identify potential sources that are both capable of and interested in providing the services outlined herein. The information is being sought solely for market research and acquisition planning purposes. Responses to the Sources Sought Notice will not serve as proposals, bids, or offers, which could be accepted by the Government to form a binding contract.

Background

The Bureau of the Fiscal Service (Fiscal Service) is a bureau of the United States Department of the Treasury (Treasury). The mission of the Fiscal Service is to promote the financial integrity and operational efficiency of the United States Government through exceptional accounting, financing, collections, payments, and shared services.

Fiscal Service plays a key role in supporting Treasury’s strategic goal of managing the United States Government’s finances effectively by operating as the financial manager and principal fiscal agent for the Federal Government. This role includes managing the national finances by collecting money due to the United States (including delinquent debt), making its payments, preventing improper payments, performing central accounting functions, and issuing debt to finance the operations of the United States Government.

DDM is an organization within Fiscal Service. DDM’s mission is to work with Federal government agencies to provide a comprehensive debt management program by identifying, preventing, collecting, and resolving debt owed to those agencies. Additionally, DDM provides debt collection services to the states. Through this mission, DDM protects the financial interests of the American people through identification and prevention of improper payments, efficient receivables management, and collection of delinquent debt.

The Debt Collection Improvement Act of 1996 requires federal agencies to refer their delinquent, non-tax federal debts to Treasury for collection, and requires Treasury to maintain a schedule of private collection contractors.

DDM operates two centralized programs to collect delinquent, non-tax debt: the Treasury Offset Program (TOP), which is a computerized matching program that offsets certain federal and state payments to collect debts; and the Cross-Servicing Program. The Cross-Servicing Program utilizes various collection actions including issuing demand letters, conducting skip tracing and telephone follow-up, reporting debts to credit bureaus, referring debts to TOP, establishing payment agreements, initiating administrative wage garnishment, resolving debts administratively, processing debtor disputes, requests for debt verification and other correspondence; referring debts to private collection agencies (PCAs), referring debts to the Department of Justice, processing agency recall requests, and issuing 1099-Cs. The Cross-Servicing Program receives debt referrals from over 800 federal program agencies. Most of those programs allow referral of their debts to PCAs for collection.

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Statement of Need

Currently, DDM requires PCA services to increase the recovery of nontax, delinquent federal debts through collection and resolution. DDM is conducting market research as part of the procurement process for an upcoming solicitation for PCA Services. DDM will use a Performance Work Statement (PWS) with performance-based service contracting characteristics for the new awards. The PCA will receive its fees based on debt collection performance. PCAs shall collect and resolve debts in a competitive environment. Fiscal Service may service the debts internally before referring the debt to a PCA but may opt to refer a debt to a PCA at any time.

The PCA Compliance and Policy Branch within DDM shall be responsible for contractor oversight and monitoring PCA performance.

General Scope and Requirements

DDM is researching PCA contractors which could potentially meet DDM’s requirements. DDM’s minimum requirements are shown in, but not limited to, the Minimum Requirements chart on page 3. See also the attached PCA Services PWS draft and Vendor Minimum Requirement Check-off.

Submission Guidelines

All electronic materials and attachments submitted shall be formatted in accordance with the Bureau of the Fiscal Service’s Security Requirements. The following file extensions are not allowable and application materials/data submitted with these extensions cannot be opened: .bat, .cmd, .com, .exe, .pif, .rar, .scr, .vbs, .hta, .cpl, html, mhtml, and .zip files.

Interested vendors shall return a completed Vendor Minimum Requirement Check-off, and no more than a 2-page capability statement, inclusive of any pictures, graphs, or charts with a font size no smaller than 9 in Arial or Times New Roman font which identifies:

1. Contact information;

2. Unique Entity Identifier (UEI);

3. Socio Economic Status(es) and (Business Size) under NAICS 561440;

4. Whether your services are available through an existing Government contract vehicle (e.g., GSA contract - please provide the contract number) or on the Open Market;

5. Organizational capabilities and key personnel (project manager(s)) showing ability to meet minimum requirements.

Responses submitted will assist the Government in its market research to determine the availability of commercial sources in determining an acquisition strategy in terms of setting aside this requirement. The respondent’s capability statement shall specify their socioeconomic status(es) according to the following categories:

• Small Business;

• 8(a) Small Business;

• HUBZone Small Business;

• Small Disadvantaged Business;

• Woman-Owned Small Business;

• Economically Disadvantaged Woman-Owned Small Business;

• Veteran-Owned Small Business;

• Service-Disabled Veteran-Owned Small Business;

• Other Than Small Business.

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Minimum Requirements Definition

Nationwide licensing and bonding Must be licensed and bonded in all 50 U.S. states, plus the District of Columbia, Puerto Rico, Guam, Virgin Islands, Northern Mariana Islands, and American Samoa by January 1, 2023.

Projects of similar size

In Fiscal Year 2022 (Oct. 1, 2021, through July 31, 2022), Fiscal Service referred approximately 970,000 debts, with a value of nearly $3B, to its PCA contractors. Please note some referrals were second placements, and past debt referral volumes do not guarantee future placements.

Projects of similar scope

Must be experienced in collecting consumer and commercial debts, to include loans and administrative debt types. Administrative debts include fees, fines, penalties, overpayments, grants, employee owed debts, and other miscellaneous categories. Some may be medical debts.

Projects of similar complexity

Fiscal Service receives debts from over 800 different federal program agencies and refers most of these debts to PCAs for collection. A PCA must be experienced collecting debts owed to the federal and/or state governments and in collecting a multitude of debts originating from different sources. A minimum of 5 years of experience of collecting federal and/or state debts is required. A PCA must also demonstrate its record of compliance with consumer protection laws, which includes but is not limited to the Fair Debt Collection Practices Act, Privacy Act of 1974, Federal Claims Collection Standards and applicable state consumer protection laws.

Proven technical ability

Must be able to stand up a reliable information technology (IT) infrastructure to ensure secure data movement via batch file processing. The IT solution must be compliant with NIST’s Federal Information Processing Standards 140-2 security requirements. A PCA must be experienced in using electronic formats and transfer protocols to automate, centralize, and transmit inbound and outbound files. The contractor will exchange files with Fiscal Service by using Secure File Transfer Protocol (SFTP) to send files over the SSH Tectia Client. Must have a non-production environment in place to validate file layouts and perform end-to-end testing. Must be able to handle some very large datasets with potential record counts over 300K in a single file where file sizes can reach 100 megabytes or more. The contractor must be able to ensure government data is stored and encrypted securely.

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Deadline for Responses

Fiscal Service will consider responses received by the established deadline; 10:00 a.m. July 31, 2023.

Responses must be submitted electronically to the following email address: purchasing@fiscal.treasury.gov.

Responding vendors shall reference “PCA Services Attn: RN/RG” in the subject line of the email.

Disclaimers

This is not a request for proposal/quote and does not imply an obligation on the part of the Government to purchase products/services or to proceed to any request for proposal/quote for such products/services. Further, this request does not obligate the Government to ultimately pursue a particular acquisition strategy. The Government shall not be liable for any costs incurred by vendors in preparing and submitting a response to this Sources Sought Notice. Submission of a response confers no rights upon the respondent.

No pricing or technical approach is being requested or will be considered at this time. This is only a sources sought posting for determining an acquisition strategy. No formal solicitation is available. The Government reserves the right to contact the vendor to verify information. Requests for additional information will not be considered an affirmative response to this posting. Telephone responses or inquiries to this request will not be accepted.

All respondents are advised that responses to this notice, in and of themselves, will in no way be considered for contract award. In the event that a resultant solicitation would ensue, interested parties would be required to respond separately and formally in order to be considered for contract award. Additionally, a determination not to compete the proposed acquisition based upon responses to this request would be at the sole discretion of the Government.

mailto:purchasing@fiscal.treasury.gov

PERFORMANCE WORK STATEMENT (PWS)

BUREAU OF THE FISCAL SERVICE

DISBURSING AND DEBT MANAGEMMENT (DDM)

PRIVATE COLLECTION AGENCY (PCA) SERVICES

1. BACKGROUND

The U.S. Department of the Treasury, Bureau of the Fiscal Service (Fiscal Service), is responsible for collecting delinquent, nontax debts owed to the United States. Federal law generally requires federal agencies that are owed nontax debts (Creditor Agencies) to refer nontax debts that have been delinquent for 120 days or more to Fiscal Service’s Cross-Servicing program for debt collection services. In addition, Creditor Agencies may refer nontax debts which are less than 120 days delinquent to Fiscal Service for debt collection services. Fiscal Service may use a variety of tools to collect such debts. For example, Fiscal Service may refer eligible debts to private collection agencies (PCAs) for debt collection services.

Prior to referring a debt to Fiscal Service’s Cross-Servicing program, a Creditor Agency is required to attempt to collect the debt by sending at least one demand letter to the debtor stating, among other things, the basis for and amount of the debt and notice of the collection actions that may take place, the opportunity to administratively challenge the debt, the debtor’s right to obtain the agency’s records related to the debt, and the debtor’s right to enter into a reasonable repayment agreement. Upon receipt of a debt from a Creditor Agency, Fiscal Service may employ a variety of collection tools in an attempt to recover the debt on behalf of the Creditor Agency. For example, as appropriate, Fiscal Service may send demand letters to the debtor, place phone calls to the debtor, refer the account to the Treasury Offset Program for purposes of offsetting a debtor’s Federal and/or State payments, refer the debt to a PCA, and report the debt to credit bureaus. Fiscal Service may service the debts internally before referring the debt to a PCA but may opt to refer a debt to a PCA at any time. If a PCA is unable to collect or resolve the debt, Fiscal Service may decide to refer the debt to another PCA, attempt to service the debt internally again, suspend collection action, or return the debt to the Creditor Agency.

During Fiscal Year 2022, Fiscal Service distributed approximately 1 million accounts with a total value of nearly $3.4 billion to its PCAs. This historical information is provided for informational purposes only and is not indicative of future referrals. Fiscal Service makes no guarantees as to any volume of business. Debts that are referred to PCAs are debts owed to the United States by individuals, businesses, organizations, or any other entities, and will not include debts owed by Federal agencies or foreign nations. Debts may be consumer or commercial and range in age from 60 days old to over 10 years old. The types of debts vary and include loans (consumer and commercial) and administrative debts (grant repayments, overpayments, fines, penalties, fees, employee debts, medical debt, and other miscellaneous debts). Most of the debtors reside in the United States (see Section 2.24 for the definition of States).

2. DEFINITIONS

2.1. ACCOUNT or DEBT is a delinquent nontax amount owed to the United States that Fiscal Service refers to the Contractor for collection services under this Blanket Purchase Agreement (BPA). The terms “account” and “debt” are used interchangeably.

2.2. ACCOUNT REFERRAL BONUS is a percentage calculated by Fiscal Service to determine the dollar amount of accounts to be distributed to the Contractor and other PCAs, as further defined in Section 6.2 (Subsequent Distributions).

2.3. ADMINISTRATIVE RESOLUTION (AR) is a determination made by the Contractor pursuant to Section

10.17 (Administrative Resolutions) that the debt should no longer be collected within Cross-Servicing because of the death of the debtor, the debtor’s total inability to pay, a bankruptcy filed by the debtor and/or impacting the collection of the debt, or the dissolution of a business entity. Fiscal Service must agree with the Contractor’s AR determination before the debt is recalled from the Contractor.

2.4. ADMINISTRATIVE WAGE GARNISHMENT (AWG) refers to a process whereby an employer withholds up to 15 percent of an individual’s disposable wages and pays those amounts to the employee’s creditor in satisfaction of an order issued by a federal Creditor Agency (including an order issued on behalf of such agency). For purposes of this BPA, AWG is conducted pursuant to 31 U.S.C. § 3720D and 31 CFR 285.11.

2.5. AVERAGE CURRENT INVENTORY BALANCE (ACIB$) is the average total dollar amount that the

Contractor is responsible for collecting during the Performance Period. Approximately once a week, Fiscal Service will record the dollar amount and number of accounts in the Contractor’s portfolio for the purpose of calculating the ACIB$. Outlier Debts are not included in the ACIB$.

2.6. BLANKET PURCHASE AGREEMENT (BPA) sets forth the expectations, parameters, and requirements for the requested services and includes the Performance Work Statement (PWS), the award documents, and all attachments/exhibits hereto.

2.7. COMMERCIAL DEBT refers to a debt that the Creditor Agency classifies as “commercial” when it refers the debt to Fiscal Service. Creditor Agencies generally classify debts as “commercial debts” if the debt arose for something other than a personal, family, or household reason. Commercial debts can be owed by either individuals or entities.

2.8. COMMISSION FEE is a percentage of the Net Collections paid to the Contractor, as further defined in Section 5 (Compensation).

2.9. CONSUMER DEBT refers to a debt that the Creditor Agency classifies as “consumer” when it refers the debt to Fiscal Service. Creditor Agencies generally classify debts as “consumer debts” if the debt arose for a personal, family, or household reason. Consumer debts are generally owed by individuals.

2.10. CONTRACTOR is a PCA and is a party to this BPA.

2.11. CREDITOR AGENCY is the originating Federal agency that referred a debt to Fiscal Service’s Cross- Servicing program.

2.12. CROSS-SERVICING PROGRAM is the program through which Fiscal Service collects delinquent federal nontax debts on behalf of Creditor Agencies pursuant to 31 U.S.C. § 3711(g).

2.13. DEBT MANAGEMENT SYSTEM is the system that Fiscal Service uses to administer its Cross-Servicing program. FedDebt is the Federal Information Security Modernization Act (FISMA)1 name for the Debt Management System, and it is also known as Artiva or Cross-Servicing Next Generation (CSNG).

2.14. FISCAL SERVICE FEES are the fees that federal agencies pay to Fiscal Service under 31 U.S.C.

§ 3711(g)(6) for debt collection services. This includes Commission Fees paid to the Contractor and fees retained by Fiscal Service.

2.15. NATIONAL DIRECTORY OF NEW HIRES (NDNH) INFORMATION means information provided by the U.S. Department of Health and Human Services, Administration for Children and Families, Office of Child Support Enforcement, to Fiscal Service containing new hire, unemployment insurance, and quarterly wage information supplied by state and federal agencies pursuant to 42 U.S.C. §§ 653(i)(1) and 653a(g)(2)(A).

1 FISMA requires federal agencies to implement a mandatory set of processes and system controls designed to ensure the confidentiality, integrity, and availability of system-related information. It defines a comprehensive framework to protect government information, operations, and assets against threats. Signed into law in 2002 and updated in 2014, FISMA requires that federal systems meet a set level of security requirements (also known as “controls”).

2.16. NET BACK RECOVERY PERCENTAGE (NBR%) is the percentage of Net Collections the Contractor has collected during the Performance Period divided by the Contractor’s ACIB$ (i.e., Net Collections / ACIB$ = NBR%). For purposes of the NBR% calculation, Net Collections excludes amounts collected on Outlier Debts. There are two types of NBR%:

• NBR% 1 is the percentage of Net Collections for debts more than 24 months delinquent in relation to the Contractor’s ACIB$,

• NBR% 2 is the percentage of Net Collections for debts 24 months delinquent or less in relation to the Contractor’s ACIB$.

2.17. NET COLLECTIONS are the amounts collected by the Contractor under this BPA, less the costs added to the debt as a result of Fiscal Service Fees.

2.18. OUTLIER DEBT is a consumer debt with an adjusted debt balance greater than or equal to $100,000, or a commercial debt with an adjusted debt balance greater than or equal to $1,000,000. For purposes of this definition, the “adjusted debt balance” is the debt balance at the time a debt is referred to the Contractor by Fiscal Service, and includes principal, interest, penalties, and administrative costs.

2.19. PERFORMANCE PERIOD is a period of time determined by Fiscal Service, normally three months, after which Fiscal Service evaluates the Contractor’s performance.

2.20. PERFORMANCE WORK STATEMENT (PWS) is a statement of work for performance-based acquisitions that describes the required results in clear, specific, and objective terms with measurable outcomes.

2.21. PRIVATE COLLECTION AGENCY (PCA) includes the Contractor and any other entity now or in the future providing debt collection services under this BPA.

2.22. PRIVATE COLLECTION AGENCY OPERATIONS AND PROCEDURES MANUAL (PCA MANUAL)

refers to the manual issued and maintained by Fiscal Service and updated from time-to-time regarding how PCAs must service Fiscal Service accounts. Fiscal Service will provide the PCA Manual to awardees after award and prior to the first distribution of accounts.

2.23. RETENTION PERIOD means the period of time the Contractor will service an account, which is generally 270 days but can be for a shorter or longer period, as further specified in Section 6.6 (Time of Servicing; Other Collection Activity), Section 6.7 (Extended Retention Period), Section 7.1 (Unilateral Right to Recall), and Section 17 (BPA Expiration and Close Out of Accounts).

2.24. STATE means the several States of the United States and also includes the District of Columbia, American Samoa, Guam, the United States Virgin Islands, the Commonwealth of the Northern Mariana Islands, and the Commonwealth of Puerto Rico.

3. GENERAL SCOPE

In accordance with Base BPA Section 2.0 Scope of Work, the purpose of this effort is to enlist the services of PCAs to recover delinquent federal nontax debts from debtors with an ability to pay and to resolve debts that are not appropriate for collection. The Contractor must perform the duties outlined in this PWS and any other documents incorporated into the BPA. The services will be compensated on a fee-for-service basis in a competitive environment with other PCAs. Accounts will be referred electronically to the Contractor. Accounts will be at least 60 days delinquent and may be over 10 years delinquent.

4. LAWS, REGULATIONS, AND STANDARDS GOVERNING COLLECTION ACTIVITY

4.1. The Contractor must comply with all applicable federal, state, and local statutes, regulations, and other laws. In addition, the Contractor must comply with any special policies, rules, and procedures that apply to particular Creditor Agency programs. Fiscal Service will monitor the Contractor’s collection activities.

Failure to comply with applicable laws, rules, and policies will be considered a breach of contract. A nonexclusive list of federal statutes and regulations governing the Contractor’s collection activities include:2

• Federal Claims Collection Act of 1966 (Pub. Law No. 89-508), as amended by the Debt Collection Act of 1982 (Pub. Law No. 97-365), as further amended by the Debt Collection Improvement Act of 1996 (Pub. Law No. 104-134), primarily codified at 31 U.S.C. § 3701, § 3711-3718, § 3720A- 3720E and 5 U.S.C. § 5514, describing the Government’s administrative debt collection authorities and responsibilities;

• Fair Debt Collection Practices Act (Pub. Law No. 95-109), as amended, 15 U.S.C. § 1692 et seq.

and Regulation F, 12 C.F.R. Part 1006, which regulate the debt collection practices of private collection agencies;

• Fair Credit Reporting Act of 1970 (FCRA) (Pub. Law No. 91-508), 15 U.S.C. 1681 et seq., regulates the collection, dissemination, and use of consumer information, including consumer credit information;

• Telephone Consumer Protection Act of 1991 (TCPA) (Pub. Law No. 102-243), as amended, 47 U.S.C § 227, restricts the use of telephone solicitations (telemarketing) and the use of automated telephone equipment;

• Servicemembers Civil Relief Act (SCRA) (Pub. Law No. 108-189), as amended, 50 U.S.C App. § 501 et seq., provides certain protections to members of the military and their dependents;

• Electronic Funds Transfer Act of 1978 (EFTA) (Pub. Law No. 95-630), as amended, 15 U.S.C § 1693 et seq., and Regulation E, 12 C.F.R. Part 1005, protects individual consumers engaging in electronic fund transfers and remittance transfers and sets out the requirements pertaining to such transfers;

• Privacy Act of 1974 (Pub. Law No. 93-579), as amended, 5 U.S.C. § 552a, restricts the disclosure of personal information about individuals and governs the handling of such information by the Government and its PCAs;

• Health Insurance Portability and Accountability Act of 1996 (HIPAA) (Pub. Law No. 104-191), and Standards for Privacy of Individually Identifiable Health Information at 45 C.F.R. Parts 160 and 164, Subparts A and E, governs the handling of protected health information;

• Federal Parent Locater Service (Pub. Law No. 108-447, Div. H, Title VI, § 643), 42 U.S.C.

§ 653(j)(9), governs the handling of information disclosed from the NDNH;

• Federal Claims Collection Standards, 31 C.F.R. Parts 900-904, govern the administrative procedures with respect to collection of debts owed to the United States, including the criteria for accepting installment payments and compromise agreements;

• Treasury Financial Manual, Volume I, Part 3, Receivable and Delinquent Debt Management, and Volume I, Part 5, Chapter 7000, Credit and Debit Card Collection Transactions, as amended, sets out responsibilities applicable to the Contractor with respect to collection of delinquent nontax debts and the requirements to be followed when collecting obligations via credit or debit card.

4.2. The Contractor must be familiar with other applicable federal laws and guidance, such as:

• Federal Debt Collection Procedures Act (Pub. Law No.101-167), 28 U.S.C. § 3001 et seq., governs the enforced collection of debts through the litigation process (the Contractor is not authorized to handle any litigation on behalf of the Government);

• Laws related to Treasury’s debt collection programs, including the Treasury Offset Program, specifically 31 U.S.C. § 3716 (administrative offset), 26 U.S.C. § 6402 and 31 U.S.C. § 3720A (tax refund offset), 5 U.S.C. § 5514 (salary offset), and related regulations at 31 C.F.R. Part 285;

• Managing Federal Receivables, Chapter 6, Delinquent Debt Collection, and Appendixes 4 to 8, provides federal agencies with a general overview of the standards, guidelines, and procedures related to the collection of delinquent debts owed to the United States.

2 The referenced laws and explanations are provided only as a reference point. The Contractor is responsible for identifying and complying with all applicable law.

4.3. The Contractor must meet all applicable State and locality licensing requirements and bonding/insurance requirements.

4.4. The Contractor must comply with the laws of the jurisdiction where the debtor resides (including federal, state, and local laws), except insofar as federal law supersedes these requirements. For example, if a particular state law restricts the charge or fee that may be collected on the amount of the debt, and the restricted charge or fee is less than the Contractor’s awarded commission fee, the Contractor may collect only the fee allowed by state law.

4.5. The Contractor must indemnify and hold the Government harmless from any and all third-party liability, loss, damages, claims, and/or other expenses, including but not limited to attorney's fees (whether incurred before or after litigation has commenced) and court costs, arising under or related to the BPA.

The Contractor is not authorized to represent the interests of the United States in court or to otherwise provide legal services for or on behalf of the United States. Under no circumstances will the Government be liable for any wrongful act by the Contractor or its employees or subcontractors.

4.6. The Contractor must have access to and comply with the most current versions of applicable laws and regulations.

4.7. Postaward, awardees shall receive and comply with the PCA Manual, and any subsequent Technical Bulletins3 issued by Fiscal Service.

5. COMPENSATION

5.1. GENERALLY. Fiscal Service will pay Commission Fees to the Contractor. The pricing provisions contained in this PWS control over any conflicting provisions contained in the corresponding GSA schedule contract or attachments thereto. Fiscal Service will pay Commission Fees directly to the Contractor.

5.2. PRICING SCHEDULE. The Commission Fees will be based on the debt placement level of the debt (i.e., whether the Contractor is collecting the debt as the first PCA to service the debt (PCA1), the second PCA to service the debt (PCA2), the third PCA to service the debt (PCA3), etc.) and the Net Collections collected under the BPA. The Contractor will be paid a different Commission Fee depending on whether the Contractor is servicing the debt as PCA1, PCA2, PCA3, etc. No PCA is guaranteed placements at each debt placement level. Fiscal Service may elect to add additional placements at any time during the BPA and a Commission Fee will be established for that placement level. All awarded BPAs will have the same Commission Fees. The Commission Fee will be capped for any single collection in excess of $1,000,000. If a single collection is in excess of $1,000,000 the Commission Fee will be adjusted to pay the Contractor its Commission Fee as if it made a $1,000,000 collection, rather than the full amount of the Net Collection. The Contractor may not solicit multiple payments from the debtor to avoid the Commission Fee threshold. The Commission Fee Schedule is as follows:

Table 1: PCA Commission Fee Schedule

Debt Placement Level % of Net Collections Maximum Fee PCA1 X X% of $1,000,000 PCA2 Y Y% of $1,000,000 PCA3 Z Z% of $1,000,000

5.3. ADJUSTMENTS TO PRICING SCHEDULE. The Commission Fees as stated in Section 5.2 Pricing

Schedule will apply to the base period of the BPA. Fiscal Service reserves the right to change the Pricing Schedule and adjust the fee structure at each option period and any such changes would be negotiated with the Contractor(s).

3 Fiscal Service will issue Technical Bulletins periodically containing technical direction and/or program updates.

5.4. PILOTS. During the term of the BPA, Fiscal Service may offer the Contractor and other PCAs opportunities to voluntarily participate in one or more pilots wherein Fiscal Service may change components of the BPA, such as its Pricing Schedule and/or debt distribution methodology, for a defined pool of debts. Distributions of debts for PCAs participating in this pilot may not be based on the PCA’s Net Collections and NBR%. Prior to beginning any such pilot, Fiscal Service will document the requirements of the pilot and ensure mutual understanding of those requirements, including duration of the pilot and the applicable compensation.

5.5. CALCULATION. Except as set forth below, Fiscal Service will calculate Commission Fees on any payment received on an account by the Government, beginning on the day the account is transferred to the Contractor and ending on the day the account is recalled by or returned to the Government. For purposes of calculating the performance evaluation, the age of the debt will not be recalculated after the account is transferred to the Contractor. The Commission Fee will be determined at the time the debt is transferred to the Contractor and will not change during the Contractor’s Retention Period. When Fiscal Service refers a debt to the Contractor for collection, the debt amount will generally include the following debt components: principal, interest, penalties, and administrative costs (which may include costs incurred by the Creditor Agency and potential fees Fiscal Service will charge the Creditor Agency).

5.6. EXCLUSIONS. The Contractor will not be paid a Commission Fee for the following:

• Collections received after the account has been recalled;

• Unidentified payments, i.e., payments that cannot be matched and posted to a debtor's account;

• Collections in excess of a debtor's balance, resulting in overpayment of the debt;

• Collections by the Government through administrative, tax refund, salary, or other type of offset;

• The amount of debt that relates to costs added to the debt as a result of Fiscal

Service Fees;

• Balance adjustments made or other administrative actions taken by the

Government that result in a decrease of the debt balance; and

• Collections resulting from court proceedings or other judicial actions.

5.7. ADJUSTMENTS TO COMPENSATION. The Contractor is generally authorized to compromise debts and enter into repayment agreements within certain thresholds and standards as set forth in this BPA and applicable law. Fiscal Service retains the right to deduct from the Contractor's Commission Fees due under this BPA an amount equal to the amount of loss to the Government on any commitment, compromise, or repayment agreement made by the Contractor inconsistent with the applicable thresholds and standards as set forth in this BPA and applicable law. For example, if the Contractor fails to properly document the justification for accepting a repayment agreement, Fiscal Service may, at its option, presume that a compromise settlement or repayment agreement is inconsistent with the applicable requirements. The amount of loss to the Government will be calculated based upon the difference between the Net Collections that Fiscal Service determines should have been collected by the Contractor and the Net Collections actually received by the Government. This may result in a decrease to the Contractor’s compensation or may result in the Contractor owing a debt to Fiscal Service.

6. ACCOUNT REFERRALS

6.1. INITIAL DISTRIBUTION. For purposes of determining how Fiscal Service will distribute accounts among the PCAs under this BPA, Fiscal Service will divide the accounts available for distribution into the categories listed below. During the first Performance Period under this BPA, Fiscal Service will distribute to each of the PCAs the accounts in categories 1 through 14 as equally as possible, based on dollar value of the debt. Distribution is based upon the accounts available at the time of distribution and no PCA is guaranteed accounts from every category. All debts available for distribution, other than Outlier Debts, will be divided as follows:

Table 2: Debt Distribution Categories 1-14 Category Number Dollar Range Age of Debt Type of Debt

1 $25 - $999.99 ≤24 months Consumer 2 $25 - $999.99 >24 months Consumer 3 $1,000 - $4,999.99 ≤24 months Consumer 4 $1,000 - $4,999.99 >24 months Consumer 5 $5,000 - $9,999.99 ≤24 months Consumer 6 $5,000 - $9,999.99 >24 months Consumer 7 $10,000 - $99,999.99 ≤24 months Consumer 8 $10,000 - $99,999.99 >24 months Consumer 9 $25 - $4,999.99 ≤24 months Commercial 10 $25 - $4,999.99 >24 months Commercial 11 $5,000 - $49,999.99 ≤24 months Commercial 12 $5,000 - $49,999.99 >24 months Commercial 13 $50,000 - $999,999.99 ≤24 months Commercial 14 $50,000 - $999,999.99 >24 months Commercial

6.2. SUBSEQUENT DISTRIBUTIONS. During subsequent Performance Periods, Fiscal Service will distribute a percentage of accounts in each category 1 through 14, based on dollar value, in accordance with the Contractor’s Account Referral Bonus. Fiscal Service will determine the Contractor’s Account Referral Bonus by evaluating the Contractor’s NBR% for the immediately prior Performance Period. The Contractor’s NBR% 1 will be weighed at 60% and the NBR% 2 will be weighed at 40% for purposes of calculating the Contractor’s performance score. Fiscal Service will then compare the Contractor’s performance score with the performance scores of the other PCAs. Fiscal Service will categorize the Contractor’s score as above average, average, or below average, based on a standard deviation. Above average performers will be assigned higher referral percentages in each category 1 through 14, average performers will be assigned average referral percentages in each category 1 through 14, and below average performers will be assigned lower referral percentages in each category 1 through 14. Fiscal Service will determine these percentages in its sole discretion.

6.3. OUTLIER DEBTS. For all Performance Periods, Outlier Debts will be divided among the PCAs as equally as possible, based on dollar value, from the following categories:

Table 3: Debt Distribution Categories 15-16 (Outlier Debts)

Category Number Dollar Range Type of Debt 15 ≥$100,000 Consumer 16 ≥$1,000,000 Commercial

6.4. CHANGES TO DISBRIBUTION PROCESS. Fiscal Service reserves the right to change the method by which it distributes accounts among the PCAs, including by changing the method of calculating the Account Referral Bonus. Fiscal Service will provide advance notice to the Contractor and other PCAs of any such change.

6.5. ELECTRONIC TRANSFER. Fiscal Service will electronically transfer accounts to the Contractor;

therefore, the Contractor must have the capability to accept accounts through this method.

6.6. TIME OF SERVICING; OTHER COLLECTION ACTIVITY. Subject to the provisions of this BPA, the Contractor will generally have 270 days to attempt collection on these accounts. Fiscal Service reserves the right to change the Retention Period and will communicate any changes to the Contractor in advance. After the Contractor has returned or Fiscal Service has recalled from the Contractor an unresolved account, Fiscal Service may refer the account to other PCAs for additional debt collection services or may decide to continue servicing the debt internally. Fiscal Service will generally not distribute a particular account to the Contractor more than once under the same BPA. After referral to the Contractor, Fiscal Service will generally stop all active collection on the account referred but may continue to attempt collection through the offset of federal and/or state payments made to debtors and may report debts to credit bureaus.

6.7. EXTENDED RETENTION PERIOD. Notwithstanding the above paragraph, the Contractor will retain accounts beyond 270 days under the following circumstances:

• Repayment Plan -- The Contractor will retain accounts that are in repayment status for the length of the repayment agreement, except as specified in Section 7.1 (Unilateral Right to Recall) and Section 17 (BPA Expiration and Close Out of Accounts).

• Administrative Wage Garnishment -- The Contractor will retain accounts that are in an active AWG status for the life of the AWG order if the employer is making periodic payments as required by the order, except as specified in Section 7.1 (Unilateral Right to Recall) and Section 17 (BPA Expiration and Close Out of Accounts).

• Disputes – For purposes of calculating the 270-day Retention Period, Fiscal Service will not include the time period for which the Contractor is required to suspend collection activity under Section 10.6 (Disputes). Fiscal Service will extend the Retention Period by the number of days between the date the dispute is entered in the Debt Management System and the date it is resolved to the account Retention Period.

• Fiscal Service’s Discretion -- Fiscal Service may, in its discretion, suspend the calculation of the 270-day Retention Period when the Contractor is required to suspend collection activity due to:

o Disputes;

o Concurrences (Fiscal Service review of proposed payment agreements that are outside approved agreement terms);

o AWG hearings; or o Other reasons Fiscal Service deems appropriate.

• Other Exceptions -- The Contractor may submit information to the Contracting Officer’s Representative (COR) for possible retention of the account beyond 270 days, on a case-by-case basis, when the Contractor has convincing written evidence that retention will result in future payment(s) immediately following the end of the Retention Period.

7. RECALL OF ACCOUNTS

7.1. UNILATERAL RIGHT TO RECALL. Notwithstanding any other provision of this BPA, Fiscal Service reserves the right to recall any or all accounts at any time for any reason.

7.2. REQUIREMENT TO CEASE COLLECTION. When an account is recalled by Fiscal Service, the Contractor must immediately cease collection activity. Where an active AWG order is in place and the debt is recalled by Fiscal Service, the Contractor must notify the employer if AWG is terminated by sending the employer an AWG termination order. The Contractor will not be paid a Commission Fee for collections received after the account has been recalled.

8. RETURN OF ACCOUNTS

8.1. RETENTION PERIOD. The Contractor must return accounts at the conclusion of the Retention Period, which is 270 days after Fiscal Service first refers the debt to the Contractor, except to the extent extended pursuant to Section 6.7 (Extended Retention Period) or shortened under Section 7.1 (Unilateral Right to Recall) or Section 17 (BPA Expiration and Close Out of Accounts). Fiscal Service will recall from the Contractor any account that has been paid in full.

8.2. NEW INFORMATION. If the Contractor obtained any new information on an account during the Retention Period, the Contractor must provide that the new information to Fiscal Service, no later than the last day of the Retention Period. New information includes, but is not limited to, addresses, phone numbers, tax identification numbers, and employer information. If the Contractor receives correspondence from the debtor related to an account at any time after the Retention Period, the Contractor will provide a copy of that correspondence to Fiscal Service.

8.3. ELECTRONIC RETURN. The Contractor must return the account electronically according to the file formats (see Section 13.6).

9. TRAINING

9.1. INITIAL TRAINING. Prior to the first distribution of accounts under the BPA, the Contractor must train all

Contractor employees and any subcontractor employees assigned to the BPA to ensure adherence to applicable laws and regulations, Fiscal Service policies, and the Privacy Act of 1974.

9.2. ADDITIONAL TRAINING. The Contractor must conduct additional training to inform its employees and any subcontractor employees of all changes in operational procedures, laws, or regulations as they are modified or updated. This includes postaward documents including the PCA Manual, and any Technical Bulletins issued by Fiscal Service.

9.3. ANNUAL TRAINING. The Contractor must provide annual training to its employees and subcontractor employees on the Fair Debt Collection Practices Act, the Federal Claims Collection Standards, other applicable federal, state, and local debt collection laws. The Contractor must ensure that Contractor and subcontractor employees have successfully completed any State-mandated certifications and exams.

The Contractor also must annually train employees and subcontractor employees assigned to the BPA on the Privacy Act of 1974.

9.4. CERTIFICATIONS. The Contractor must certify in writing, on an annual basis (includes the option to certify electronically) that its employees and subcontractor employees have received all training required by the BPA before they begin any collection activity, and that they received updated training each year thereafter. Certifications must contain the following information: employee’s name, date(s) on which training was received, and completed training topics. The Contractor may maintain training records electronically through a Learning Management System or other electronic means. Each Contractor and subcontractor employee must have their own unique user ID to record all training. The Contractor must make certifications available for review at the request of Fiscal Service.

10. COLLECTION PROCESS

10.1. INITIAL DEMAND LETTER

10.1.1. The Contractor must send a letter to the debtor demanding payment within seven (7) calendar days of the date on which Fiscal Service refers the account to the Contractor, unless one of the following conditions exist:

• An address is not provided with the account, or the Contractor discovers the address provided is not a proper address;

• The Contractor discovers that the debt is subject to a bankruptcy stay or has been discharged in bankruptcy;

• The debtor resides in a jurisdiction that requires the Contractor to meet certain prerequisites before sending a demand letter (e.g., such as when the Contractor must first obtain debt verification documentation); or

• Fiscal Service requests in writing that a demand letter not be sent.

10.1.2. The initial demand letter must:

• Clearly identify the amount due and owed;

• State that the amount due and owed is in delinquent status;

• If applicable, explain that, because the amount listed as due and owed may be accruing daily interest and penalties, the actual amount owed may differ from that stated;

• Inform the debtor that their account was referred by the U.S. Department of the Treasury to the

Contractor under a contract for debt collection services;

• Include the name of the Creditor Agency;

• Include clear language that the communication comes from a private collection agency and avoid language that may misrepresent or imply that the Contractor is a federal agency;

• If being sent by a subcontractor for the Contractor, include the Contractor’s name or use the Contractor’s letterhead;

• Include a toll-free number for the debtor to contact the Contractor or subcontractor;

• Include a web address provided by Fiscal Service for the debtor to submit online payment(s);

and

• Include a detachable, scannable coupon, prepared in accordance with Fiscal Service provided specifications, which will help identify the payment.

10.2. FOREIGN DEBTORS. The Contractor may not send any written communication to a debtor residing outside the United States4 unless it first determines the communication is consistent with applicable law in the debtor’s jurisdiction.

10.3. LOCATING AND CONTACTING THE DEBTOR. Upon initial contact with the debtor, the Contractor must verify that the debtor's name, address, and telephone numbers are valid. The Contractor must verify the debtor's taxpayer identification number (TIN) and employer's name, address, and telephone numbers. Whenever the Contractor determines that a debtor cannot be located, the Contractor must perform skip tracing actions (i.e., actions taken to locate the debtor), including but not limited to those outlined in an awardee’s technically approved response to this RFQ. The Contractor must document any skip tracing actions in its system. If the Contractor locates the debtor at an address other than the one provided by Fiscal Service, the Contractor must issue a demand letter within one business day of updating the debtor’s address in the Contractor’s system. The Contractor must attempt a minimum of one outbound phone call to the debtor, in compliance with all federal, state, and local laws.

10.4. COLLECTION LETTERS. The Contractor must obtain Fiscal Service approval of any collection letters, including the required letters listed below, prior to use by the Contractor under this BPA. The Contractor must also obtain prior Fiscal Service approval of any changes made to any letters previously approved by Fiscal Service. To the extent any of these letters includes a scannable coupon, that coupon and any changes to the coupon are also subject to Fiscal Service approval.

• Demand letter for all debts other than Medicare Secondary Payer debts

• Demand letter for Medicare Secondary Payer debts

• Misdirected payments letter (informs remitter that payments may not be sent directly to the

Contractor and provides the remitter with payment instructions)

• Repayment Agreement Letter (One-time lump sum payment and payment in installments)

• Partial Repayment Agreement Letter (One-time lump sum payment and payment in installments)

• Compromise Agreement Letter (One-time lump sum payment and payment in installments)

• Repayment/Partial Repayment/Compromise Agreement Request Denial Letter

• Overdue Payment Letter

• AWG Notice Letter

• AWG Suspension Letter

• AWG Resume Letter

• AWG Termination Order

• AWG Balance Change Letter

• AWG Misdirected Payments Letter

4 See Section 2.24 for the definition of States.

10.5. CALL RECORDINGS

10.5.1. The Contractor must record all collection calls with debtors, debtor’s representatives, and any other parties. Collection calls refer to any outgoing or incoming calls related to any Fiscal Service account. The Contractor must inform all parties that calls will be recorded and/or monitored for quality review purposes.

10.5.2. The Contractor must provide Fiscal Service the capability to remotely access recordings of the Contractor’s collection calls through a secure interface. Fiscal Service will use the call recordings to, among other things, perform compliance activities as it deems appropriate, including reviews of collection activities, to assess call quality on Fiscal Service accounts, and monitor individual collectors in reference to complaints. Remote access to call recordings must include all collection calls regardless of account, subject, or duration. Other requirements include:

• Storage of calls for at least the entire period an account is serviced by the Contractor;

• Ability to retrieve call recordings for specific debts or collectors;

• Ability to retrieve specific call recordings by date;

• Safeguarding recorded calls in accordance with security requirements outlined in Section

13 (System, Safeguarding, and Security Requirements) and Attachment A – Security Requirements; and

• Technical support to assist Fiscal Service with any issues accessing the Contractor’s call recordings.

10.5.3. The Contractor must provide training, manuals, procedures, or any other information necessary for Fiscal Service staff to utilize the Contractor’s call recording system.

10.6. DISPUTES

10.6.1. In response to collection efforts, debtors sometimes dispute the propriety of the collection efforts.

Disputes typically include a claim by the debtor that the debt was never incurred, that it was paid in full, or that it should have been discharged. AWG hearing requests are not “disputes” for purposes of the BPA and are described in Section 10.15.6 (Hearing Requests).

10.6.2. The Contractor must immediately suspend its collection activity on an account upon receipt of a dispute from the debtor or the debtor’s authorized representative but SHALL NOT RETURN THE ACCOUNT to Fiscal Service unless otherwise instructed to do so by Fiscal Service (or unless required to do so in accordance with Section 8 (Return of Accounts)). The Contractor must refer all written disputes to Fiscal Service within two business days after receipt from the debtor. The Contractor must obtain, in writing whenever possible, the reason for the debtor's dispute and must forward this information to Fiscal Service for resolution of the dispute.